General Market Comment 02.10.19

US indices were under pressure on Tuesday after disappointing manufacturing data fuelled worries over the U.S. economy. ISM Manufacturing PMI declined to 47.8 missing the 50 estimate for September compared to 49.1 in August, marking a 10 year low. Every S&P 500 sector closed in the red with the worst performing stocks in the Automobiles & Components (-3%), Transportation (-2.67%) and Capital Goods (-2.49%) sectors. In other economic news, Markit US Manufacturing PMI slightly increased to 51.1 beating the 51 estimate for the September final reading compared to 51 in the preliminary reading. US Construction Spending increased 0.1% missing the 0.5% estimate for August compared to a revised 0.0% change the prior month. Finally US Auto Sales rose to 17.19M beating the 17M estimate for September compared to 16.97M in August. On Wednesday, economists expect US MBA Mortgage Applications for the week ending September 27 and ADP Employment Change for September.

European markets are expected to start-open on a positive-negative-flat note.

Foreign Exchange

The US dollar was bearish against most of its major pairs on Tuesday with the exception of the NZD, AUD and GBP. On the economic data front, Markit US Manufacturing PMI slightly increased to 51.1 beating the 51 estimate for the September final reading compared to 51 in the preliminary reading. US ISM Manufacturing PMI declined to 47.8 missing the 50 estimate for September compared to 49.1 in August, marking a 10 year low. US Construction Spending increased 0.1% missing the 0.5% estimate for August compared to a revised 0.0% change the prior month. Finally US Auto Sales rose to 17.19M beating the 17M estimate for September compared to 16.97M in August. On Wednesday, economists expect US MBA Mortgage Applications for the week ending September 27 and ADP Employment Change for September.

The Euro was bullish against most of its major pairs with the exception of the CHF and JPY. In Europe, the euro-zone inflation rate was 0.9% in September vs 1% in August. It was expected to be flat. Separately, the euro-zone PMI manufacturing index was 45.7 in the September second reading vs 45.6 in first reading and 47 the prior month, marking its lowest level since September 2012. The UK PMI manufacturing index increased to 48.3 beating the 47 estimate for September from 47.4 in August.

The Australian dollar was bearish against all of its major pairs.

Commodities

After the close of Wall Street, WTI Crude Future (NOV 19) was about flat to $53.66. The contract was below its 20D MA (@ $56.89) and below its 50D MA (@ $55.84).

Gold was up $8.2 to $1480.6. The precious metal was below its 20D MA (@ $1504) and below its 50D MA (@ $1495).

Copper Future (DEC 19) on Comex was down 1.4c to 256.5c/lb. The contract was below its 20D MA (@ 261.63c) and below its 50D MA (@ 261.34c). In Europe, the London Metal Exchange reported its copper inventories decreased 5650 tons to 258775 tons.